Who Has Been Selling Eureka Group Holdings Limited (ASX:EGH) Shares?

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Eureka Group Holdings Limited (ASX:EGH), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

View our latest analysis for Eureka Group Holdings

The Last 12 Months Of Insider Transactions At Eureka Group Holdings

Over the last year, we can see that the biggest insider sale was by the insider, Victor Plummer, for AU$878k worth of shares, at about AU$0.35 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of AU$0.43. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was 100% of Victor Plummer's stake. The only individual insider seller over the last year was Victor Plummer.

Over the last year, we can see that insiders have bought 1.16m shares worth AU$458k. On the other hand they divested 2.50m shares, for AU$878k. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Eureka Group Holdings Insiders Bought Stock Recently

It's good to see that Eureka Group Holdings insiders have made notable investments in the company's shares. Specifically, Executive Chairman Murray Boyte bought AU$130k worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.

Insider Ownership of Eureka Group Holdings

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Based on our data, Eureka Group Holdings insiders have about 4.9% of the stock, worth approximately AU$4.9m. However, it's possible that insiders might have an indirect interest through a more complex structure. We consider this fairly low insider ownership.

So What Do The Eureka Group Holdings Insider Transactions Indicate?

The recent insider purchase is heartening. However, the longer term transactions are not so encouraging. Neither the level of insider ownership, nor the transactions over the last twelve months inspire us, but we think the recent buying is positive. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To that end, you should learn about the 3 warning signs we've spotted with Eureka Group Holdings (including 1 which is concerning).

But note: Eureka Group Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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